Takarekbank analyst Gergely Suppan predicted that gross wages would continue to rise moderately in Hungary, while the Ministry of National Economy highlighted the year-on-year rise in the number of people employed in the country’s private sector in September after the Central Statistics Office (KSH) reported on Friday morning that gross wages rose 5.2% yr/yr in September.

The KSH noted wage growth slowed from a 6.5% increase yr/yr in August, after accelerating in annual comparison from June’s 4.6% until August.

The Ministry of National Economy noted that the number of private-sector employees has risen every month in Hungary since May, 2010, when the current government took office, attributing the 14,500 private-sector jobs added in September to a 2.1% m/m rise in manufacturing jobs.

The ministry said that the overall 1.1% yr/yr decline in the number of employed in Hungary in September stemmed from the reduction of public-sector employees.

The Ministry of National Economy added that the government’s 16% flat tax has exercised a positive effect on wages.

Gergely Suppan of TakarekBank predicted that gross-wage growth would rise moderately primarily as a result of the base effect, noting that a portion of 2010 year-end wage benefits and bonuses were paid out in early 2011 as a result of personal income-tax changes.

Mr Suppan said that domestic demand was still too weak to fuel increased employment in the sectors of the economy based on production and services for the domestic market.

Mr Suppan remarked that Hungary’s labor market would remain slack as a result of decreasing GDP growth.

The TakarekBank attributed the 8.2% rise in public-sector gross wages partially to a one-third decline in the number of public-sector employees between September, 2011 and September, 2010.

Mr Suppan predicted that private-sector employment would continue to rise moderately as a result of manufacturing-industry investments.

The TakarekBank analyst said that consumption is unlikely to rise as a result of caution among consumers and the heavy burdens of foreign-currency-denominated loans.

Central and Eastern Europe is a region with healthy growth and massive potential, UniCredit stated at a workshop hosted at the annual Euromoney CEE Forum in Vienna, adding that it expects more of the same from the regionʼs economic environment.

The Audi Hungaria Independent Trade Union (AHFSZ) has formed a strike committee after failing to reach an agreement on wage rises with management, the union said on its homepage, according to a report by state news wire MTI.

Moodyʼs Investors Service has released a report about the CEE regionʼs economic outlook for the year 2019, saying that the regionʼs growth is strong, but somewhat slowing, while the tightening of global funding conditions may pose challenges, according to a press release sent to the Budapest Business Journal.

France and Germany have agreed to deepen a 1963 treaty of post-war reconciliation in a bid to show that the European Union’s main axis remains strong and to counter growing Euroskeptic nationalism among other members including Hungary, news agency Reuters reported Wednesday.

Hungarian employers and unions reached agreement on minimum wage increases on Sunday, December 30, a day before the deadline. The sides agreed to raise the minimum wage for both skilled and unskilled workers by 8% from the start of 2019, and again by 8% in 2020, according to official government website kormany.hu.

The Hungarian Investment Promotion Agency has named Morgan Stanleyʼs Budapest office the "Center of Excellence of the Year", with the firm topping a list of 71 competing companies, according to a press release sent to the Budapest Business Journal.

Hungary’s inflation showed a decline after accelerating for eight months, and was lower than the consensus expectation of analysts. At the same time, the Central Statistical Office revised third-quarter GDP data, and the industrial output in October that exceeded expectations will surely contribute to an even better growth figure for 2018.